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Weekly Macro Updates

Initial Jobless Claims (Jul 20) 218k est., 206k actual, 216k prior
Continuing Claims (Jul 13) 1688k est., 1676k actual, 1689k prior
Markit US Manufacturing PMI (Jul P) 51.0 est., 50.0 actual, 50.6 prior
Markit US Services PMI (Jul P) 51.8 est., 52.2 actual, 51.5 prior
New Home Sales MoM (Jun) 5.1% est., 7.0% actual, -8.2% prior: R-
Durable Goods Orders (Jun P) 0.7% est., 2.0% actual, -2.3% prior: R-
Durables Ex Transportation (Jun P) 0.2% est., 1.2% actual, -2.3% prior: R+
Capital Goods Orders Nondefense Ex Air (Jun P) 0.2% est., 1.9% actual, 0.3% prior: R-
Capital Goods Shipped Nondefense Ex Air(Jun P) -0.2% est., 0.6% actual, 0.5% prior: R-
Advance Goods Trade Balance (Jun) -$72.5 b est., -$74.2b actual, -$75.0b prior: R-
GDP Annualized QoQ (2Q A) 1.8% est., 2.1% actual, 3.1% prior
Personal Consumption (2Q A) 4.0% est., 4.3% actual, 1.1% prior: R+
Kansas City Federal Reserve Manufacturing Activity (Jul) 3 est., -1 actual, 0 prior
Dallas Federal Reserve Manufacturing Activity (Jul) -6.0 est., -6.3 actual, -12 prior 

Strong or Improving
Inconclusive or lacking trend
Weak or declining
R+ Revised up
R- Revised down

Directional change based on general
long-term tends.
Capital Market Implications

Last week’s economic reports reinforced the recent bifurcation of the US economy.  On the one hand, the industrial sector, battered by slowing global growth and trade war tariffs, remains depressed while the service sector, supported by robust consumer spending, continues to expand.  Indeed, the most recent manufacturing PMI report registered its lowest level in a decade yet, during the second quarter, consumer consumption reached 4.3% annualized, its highest level in a number of years.  As consumer spending represents two-thirds of US economic activity, second-quarter GDP advanced at a better-than-expected 2.1% annualized rate.  Additionally, manufacturing momentum picked up at the end of the quarter, as both durable goods and capital goods orders turned up in June.  Whether or not that momentum is sustained remains to be seen, as regional Federal Reserve manufacturing surveys were tepid in July.

Other than Boeing and Caterpillar, the companies that reported second-quarter earnings last week exceeded expectations.  Thus, stocks did relatively well and markets ended the week ahead.  Both the Russell 2000 and the S&P 500 Index rose, up 2.0% and 1.7%, respectively, however, the Dow Jones Industrial Index, weighed down by Boeing, was flat.  On the international front, as economic news was not as sanguine, stocks slipped.  Developed markets were off slightly while emerging markets fell -0.8%.  With the Federal Reserve on track to cut interest rates 25 basis points on July 31st, bond prices firmed throughout the week.  Bonds including corporates, municipals and high yield bonds all rallied last week.